Dollar falls ahead of Fed announcement

AP News
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Posted: Jun 19, 2012 1:37 PM
Dollar falls ahead of Fed announcement

NEW YORK (AP) — The dollar is falling against most major currencies on expectations that the Federal Reserve will announce new plans to boost the U.S. economy.

The euro fell to $1.2709 from $1.2580 late Monday. The British pound rose to $1.5734 from $1.5665.

The Fed ends its two-day meeting Wednesday. Economists expect the central bank to either announce new bond-buying plans or to signal that a plan is in the works.

The Fed has launched two rounds of bond purchases to lower long-term interest rates and make stocks more attractive to investors.

Lower interest rates can weigh on a currency by reducing the returns investors get from holding it. With a third round of bond-buying still an option, traders sold dollars.

The dollar fell to 78.92 Japanese yen from 79.13 yen.